Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

Received a CP2000 from IRS on Retirement distributions I am…

Received a CP2000 from IRS...
Received a CP2000 from IRS on Retirement distributions I am 54 years old and closed my retirement accounts when I became disabled I am on SSDI now and didn't think I had to pay the 10% penalty
Show More
Show Less
Ask Your Own Tax Question
Answered in 3 minutes by:
12/14/2017
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,767
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
Verified

Hello Jeff,

My name is ***** ***** I will assist you.

The CP2000 is a notice from the IRS that you may agree or disagree with.

There is an exception to the 10% penalty if you are currently disabled. You should reply to the CP2000 notice and inform the IRS of your disability, preferably backed with a doctors note

Ask Your Own Tax Question

Below is an excerpt from the instructions of IRS Form 5329

https://www.irs.gov/pub/irs-pdf/i5329.pdf

"Distributions due to total and permanent disability. You are considered disabled if you can furnish proof that you cannot do any substantial gainful activity because of your physical or mental condition. A medical determination that your condition can be expected to result in death or to be of long, continued, and indefinite duration must be made. "

Ask Your Own Tax Question
Customer reply replied 8 months ago
A letter benefit verification letter for Social Security Admin that I am receiving monthly disability payment will not work

Generally you would submit IRS form 5329 along with your tax return.

Ask Your Own Tax Question
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,123
Experience: 35 years tax experience, including four years at a Big 4 firm.
Verified

I see you have requested a new professional. I'm PDtax. I can assist.

Ask Your Own Tax Question

You will want to file an amended return, form 1040x, to correct the penalty charge. In it, you report your income and the IRS revision on column 1, then correct the penalty in column 2, then reflect the numbers you originally filed in column 3.

You will need to attach a form 5329 which claims your disability exception. And, you are correct, your social security disability letter will not be IRS accepted proof. Their definition is different for disability then SSDI.

You will need third party proof that addresses your disability and your inability to be employed.

Along with properly completing the form, you should submit at least one signed letter from a licensed physician attesting to the severity of your disability. That will generally satisfy any questions IRS might otherwise have. Once you provide appropriate evidence from a doctor, it’s usually enough to satisfy IRS that you are, in fact, disabled enough to claim the exception.

I suggest the amended return because IRS is a paperwork agency, and your response is processed better with the appropriate paperwork. Both the 1040x and 5329 with third party support will be needed and are processed much more easily than support you create.

Thanks for asking at just answer. Good luck with your response. Positive feedback is appreciated, five stars being best. I'm PDtax.

PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,123
Experience: 35 years tax experience, including four years at a Big 4 firm.
Verified
PDtax and 87 other Tax Specialists are ready to help you
Ask your own question now
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask PDtax Your Own Question
PDtax
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,123
5,123 Satisfied Customers
Experience: 35 years tax experience, including four years at a Big 4 firm.

PDtax is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I was wondering if you can take a pension lump sum and roll
I was wondering if you can take a pension lump sum and roll it over to buy a new house without being taxed I'm 58 years old and reach full retirement with my company … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I became disabled in 2016 permanently and unable to work. I
I became disabled in 2016 permanently and unable to work. I am on SSDI now for income. I moved my 403B money to an IRA to avoid paying a 10% tax penalty. I next cashed out the IRA but did not have to … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I have been receiving SSDI benefits since late 2005. I was
I have been receiving SSDI benefits since late 2005. I was 51 years old when a determination of full disability was made, two years after I first applied for benefits. I turned 59 1/2 years old in Mar… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Do I have to pay a penalty on my ESOP if the company I worked
Do I have to pay a penalty on my ESOP if the company I worked for went out of business. … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I have $125,000 in a rollover account from a previous
I have $125,000 in a rollover account from a previous employer I have invested with Vanguard. I am 58 years old and was recently awarded social security disability. I had a brain bleed that me somewha… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I just received a 1099-R from my IRA retirement account. My
I just received a 1099-R for withdrawals from my IRA retirement account. My son has had a good income for years, but this past year he was laid off and trouble finding comparable work. He then became … read more
abci168
abci168
Principal
27 satisfied customers
I have a question I took a loan out on my 401K on November
I have a question I took a loan out on my 401K on November 2913 on was on LTD at the time my doctor told me in Feb of 2014 that I could not go back to work and for me to file for disiablilty. So I did… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
my client has 41k in her 401k plan. she is 55 yrs old and last
my client has 41k in her 401k plan. she is 55 yrs old and last year she became disabled. she needs to move her 401k money to ira but rather then that she would like to donate the entire amount to cher… read more
abci168
abci168
Principal
27 satisfied customers
I lost my job last year and was unemployed for 6 months. In
I lost my job last year and was unemployed for 6 months. In order to cover my mortage, child support, and medical expenses- I received a lump sum distribution from my 401K. I sold my house, and took a… read more
Anne
Anne
Master Tax Preparer
1,328 satisfied customers
I have been totally disabled since 06/08. My former employer
I have been totally disabled since 06/08. My former employer provided STD and LTD until 12/10. Even though my doctors would not release me for work at all, the LTD administrator determined I could wor… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I make 36000 a year. I had a roth IRA with 5600 in it. The
I make 36000 a year. I had a roth IRA with 5600 in it. The money that was in it was from a fixed interest (1/2 a percent) loan. I had to withdraw the money. I claim 1 for my taxes, I do not pay state … read more
Charles Greiner
Charles Greiner
Owner
Bachelor's Degree
2,436 satisfied customers
I have a small retirement account ($2000) I want to cash in.
I have a small retirement account ($2000) I want to cash in. I'm 27 years old, not making much money (actually on unemployment right now) and am looking to start school in Sept/Oct. 2011. I need the m… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I have been off work since May. I have medical conditions and
I have been off work since May. I have medical conditions and many medical bills and I am going to apply for social security disability. Can I take out money from my IRA without penalty to pay my medi… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I had my taxes filed by H & R Block, they told me I had to
I had my taxes filed by H & R Block, they told me I had to pay a penalty on my 401K, I had rolled over to an IRA, but had to use it to live on throughout the year. I have been awarded Social Security … read more
Bill
Bill
Master's Degree
2,278 satisfied customers
I am 54 years old, I cashed in a small retirement plan this
I am 54 years old, I cashed in a small retirement plan this year so I am subject to the 10% tax and the 10% penalty. I have a daughter in college. Is there a way to avoid the 10% penalty in this situa… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
I had to withdraw my IRA early because I am now disabled ...
I had to withdraw my IRA early because I am now disabled and we needed the money to pay off bills as I have no income coming in to help pay bills until the SSA decides they agree I am disabled. We nee… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
If I withdraw from an IRA prior to retirement, and have ...
If I withdraw from an IRA prior to retirement, and have taxes withheld from that amount, do I still have to pay another 10% in taxes? I withdrew funds from my IRA, had federal taxes withheld from the … read more
MequonCPA
MequonCPA
CPA Firm Owner
Master's Degree
2,165 satisfied customers
we will be taking 75,000.00 out of our investment acct. to ...
we will be taking 75,000.00 out of our investment acct. to buy land to build a home on and we make 100,000.00 yearly. what kind of tax rate or tax payment will be incurred in 2007. &nbs p; karen jeter… read more
Zhicheng Lai
Zhicheng Lai
Master Degree
426 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x